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19-0510 Friday “Daily Bugle”

19-0510 Friday “Daily Bugle”

Friday, 10 May 2019

TOPThe Daily Bugle is a free daily newsletter from Full Circle Compliance, containing changes to export/import regulations (ATF, DOE/NRC, Customs, NISPOM, EAR, FACR/OFAC, FAR/DFARS, FTR/AES, HTSUS, and ITAR), plus news and events. Subscribe here for free subscription.

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  1. President Imposes Sanctions Against Iranian Iron, Steel, Aluminum, and Copper Sectors
  1. Items Scheduled for Publication in Future Federal Register Editions 
  2. Commerce/BIS: (No new postings.) 
  3. State/DDTC: (No new postings.)
  4. UK/ECJU Publishes Updated Guidance Concerning the Procurement Channel for Export of Nuclear and Dual-Use Goods and Services to Iran
  5. UK Government Publishes Guidance Concerning Russia Sanctions
  6. Australia DEC Announces 2019 Outreach Events
  7. Singapore Customs Updates of Interest: Change of Office Location for Company Compliance Branch
  1. Business Leader: “UK Satellite Exports Go Into Orbit”
  1. F. A. DeBusk, D. Dholakia & M. Duffy: “OFAC Speaks Loudly, Carries a Bigger Stick”
  2. G.R. Tuttle: “Update on 301 List 3 Implementation Date”
  3. S. Cogman, J. Cross & D. Hudson: “OFAC Emphasizes Importance of Risk-Based Sanctions Compliance Programs for U.S. and International Companies”
  4. U. Kühn: “Can We Still Regulate Emerging Technologies?”
  1. FCC Presents “U.S. Export Controls: The EAR from a non-U.S. Perspective”, 27 Nov in Bruchem, the Netherlands
  2. List of Approaching Events: 141 Events Posted This Week, Including 14 New Events
  1. Bartlett’s Unfamiliar Quotations 
  2. Are Your Copies of Regulations Up to Date? Latest Amendments: DHS/Customs (5 Apr 2019), DOC/EAR (11 Apr 2019), DOC/FTR (24 Apr 2018), DOD/NISPOM (18 May 2016), DOE/AFAEC (23 Feb 2015), DOE/EINEM (20 Nov 2018), DOJ/ATF (14 Mar 2019), DOS/ITAR (19 Apr 2019), DOT/FACR/OFAC (29 Apr 2019), HTSUS (18 Apr 2019) 
  3. Weekly Highlights of the Daily Bugle Top Stories 

EXIMITEMS FROM TODAY’S FEDERAL REGISTER

EXIM_a1

(Source: F
ederal Register, 10 May 2019.) [Excerpts.]
 
Executive Order 13871 of May 8, 2019 — Imposing Sanctions With Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran
 
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 212(f) of the Immigration and Nationality Act of 1952 (8 U.S.C. 1182(f)), and section 301 of title 3, United States Code, I, DONALD J. TRUMP, President of the United States of America, find that:
 
It remains the policy of the United States to deny Iran all paths to both a nuclear weapon and intercontinental ballistic missiles, and to counter the totality of Iran’s malign influence in the Middle East. It is also the policy of the United States to deny the Iranian government revenue, including revenue derived from the export of products from Iran’s iron, steel, aluminum, and copper sectors, that may be used to provide funding and support for the proliferation of weapons of mass destruction, terrorist groups and networks, campaigns of regional aggression, and military expansion.
 
In light of these findings and in order to take further steps with respect to the national emergency declared in Executive Order 12957 of March 15, 1995, and to supplement the authorities provided in the Iran Freedom and Counter-Proliferation Act of 2012 (subtitle D of title XII of Public Law 112-239), I hereby order:
 
Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:
 
  (i) to be operating in the iron, steel, aluminum, or copper sector of Iran, or to be a person that owns, controls, or operates an entity that is part of the iron, steel, aluminum, or copper sector of Iran;
  (ii) to have knowingly engaged, on or after the date of this order, in a significant transaction for the sale, supply, or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminum, or copper sectors of Iran;
  (iii) to have knowingly engaged, on or after the date of this order, in a significant transaction for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran;
  (iv) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of any person whose property and interests in property are blocked pursuant to this section; or
  (v) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this section.
 
(b) The prohibitions in this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
 
Sec. 2. (a) The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to impose on a foreign financial institution the sanctions described in subsection (b) of this section upon determining that the foreign financial institution has, on or after the date of this order, knowingly conducted or facilitated any significant financial transaction:
 
  (i) for the sale, supply, or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminum, or copper sectors of Iran;
  (ii) for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran; or
  (iii) for or on behalf of any person whose property and interests in property are blocked pursuant to this order.
 
(b) With respect to any foreign financial institution determined by the Secretary of the Treasury in accordance with this section to meet any of the criteria set forth in subsection (a)(i) through (a)(iii) of this section, the Secretary of the Treasury may prohibit the opening, and prohibit or impose strict conditions on maintaining, in the United States of a correspondent account or payable-through account by such foreign financial institution.
 
(c) The prohibitions in subsection (b) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
 
Sec. 3. I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair my ability to deal with the national emergency declared in Executive Order 12957, and I hereby prohibit such donations as provided by this section.
 
Sec. 4. The prohibitions in section 1 of this order include:
 
(a) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to subsection (a) of that section; and
 
(b) the receipt of any contribution or provision of funds, goods, or services from any such person.
 
Sec. 5. The unrestricted immigrant and nonimmigrant entry into the United States of aliens determined to meet one or more of the criteria in subsection 1(a) of this order would be detrimental to the interests of the United States, and the entry of such persons into the United States, as immigrants or nonimmigrants, is therefore hereby suspended. Such persons shall be treated as persons covered by section 1 of Proclamation 8693 of July 24, 2011 (Suspension of Entry of Aliens Subject to United Nations Security Council Travel Bans and International Emergency Economic Powers Act Sanctions).
 
Sec. 6. (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.
 
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
 
Sec. 7. Nothing in this order shall apply to transactions for the conduct of the official business of the Federal Government or the United Nations (including its specialized agencies, programmes, funds, and related organizations) by employees, grantees, or contractors thereof.
 
Sec. 8. For the purposes of this order:
 
(a) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
 
(b) the term “foreign financial institution” means any foreign entity that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent. It includes, but is not limited to, depository institutions, banks, savings banks, money service businesses, trust companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, dealers in precious metals, stones, or jewels, and holding companies, affiliates, or subsidiaries of any of the foregoing. The term does not include the international financial institutions identified in 22 U.S.C. 262r(c)(2), the International Fund for Agricultural Development, the North American Development Bank, or any other international financial institution so notified by the Secretary of the Treasury;
 
(c) the term “Government of Iran” includes the Government of Iran, any political subdivision, agency, or instrumentality thereof, including the Central Bank of Iran, and any person owned or controlled by, or acting for or on behalf of, the Government of Iran;
 
(d) the term “Iran” means the Government of Iran and the territory of Iran and any other territory or marine area, including the exclusive economic zone and continental shelf, over which the Government of Iran claims sovereignty, sovereign rights, or jurisdiction, provided that the Government of Iran exercises partial or total de facto control over the area or derives a benefit from economic activity in the area pursuant to international arrangements;
 
(e) the term “knowingly,” with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result;
 
(f) the term “person” means an individual or entity; and
 
(g) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
 
Sec. 9. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 12957, there need be no prior notice of a listing or determination made pursuant to section 1 of this order.
 
Sec. 10. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to implement this order. The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions within the Department of the Treasury. All agencies shall take all appropriate measures within their authority to implement this order.
 
Sec. 11. (a) Nothing in this order shall be construed to impair or otherwise affect:
 
  (i) the authority granted by law to an executive department or agency, or the head thereof; or
  (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
 
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
 
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
 

Sec. 12. The measures taken pursuant to this order are in response to actions of the Government of Iran occurring after the conclusion of the 1981 Algiers Accords, and are intended solely as a response to those later actions. … 

 
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OGSOTHER GOVERNMENT SOURCES

OGS_a12
. Items Scheduled
for Publication in Future Federal Register Editions

(Source:
Federal Register
)

 
* State; NOTICES; Request for Commodity Jurisdiction Determination [Pub Date: 13 May 2019.]
 
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OGS_a23
. Commerce/BIS: (No new postings.)

(Source: Commerce/BIS)

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OGS_a4
5. UK/ECJU Published Updated Guidance Concerning the Procurement Channel for Export of Nuclear and Dual-Use Goods and Services to Iran
 
 
 

(Source: UK DIT/ECJU, 8 May 2019.)
 
The Export Control Joint Unit (ECJU) of the UK Department of International Trade (DIT) has updated its guidance the procurement channel for export of nuclear and dual-use goods and services to Iran.
 
The Guidance document can be downloaded here.
See also doing business in Iran: trade and export guide.

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OGS_a5
6
. UK Government Publishes Guidance Concerning Russia Sanctions
(Source: GOV.UK, 9 May 2019.) [Excerpts.]
 
The Russia (Sanctions) (EU Exit) Regulations 2019 are intended to ensure that certain sanctions relating to Russia, which are currently in force in the UK under EU legislation and related UK regulations, continue to operate effectively after the UK leaves the EU.
 
This sanctions regime is aimed encouraging Russia to cease actions destabilizing Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine. When these regulations come into force they will replace, with substantially the same effect, relevant existing EU legislation and related UK regulations. …

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OGS_a5
7
. Australia DEC Announces 2019 Outreach Events

(Source: Australia DEC, 10 May 2019.)
 
Australia Defense Export Controls (DEC) within the Department of Defense is hosting an outreach event at the University of Sydney on 11 June 2019.

Outreach is aimed at industry and research institutions that are involved in the export, supply, publication or other movement of military and dual-use goods and technology. The goal of this program is to raise awareness of export control law by looking at what is required of exporters, what to expect when applying, and the export landscape. This year, DEC will be visiting the following cities:

 
  • Sydney – 11 June
  • Adelaide – 22 July
  • Darwin – 24 July
  • Brisbane – 24 September
  • Perth – 3 October
 

Registration and program details for our upcoming Sydney event can be accessed here.

Registration details for each subsequent city will be posted on the DEC website in the coming months. 

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OGS_a5
8
. Singapore Customs Updates of Interest: Change of Office Location for Company Compliance Branch

(Source: Singapore Customs, 8 May 2019.)
 
Singapore Customs has released the following document(s) on its website:
 
Notices

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NWSNEWS

NWS_a019.
Business Leader: “UK Satellite Exports Go Into Orbit”
 

(Source:
Business Leader, 10 May 2019.) [Excerpts.]


 
… As the [UK space] sector celebrates National Space Day and as the race to space intensifies, businesses in the UK are seeing the demand for their products and services rising globally, with small satellites leading the way. In 2018, UK exports of spacecraft including satellites grew to £282.9m, supported by DIT’s Space Exports Campaign. Growing demand is being met by companies such as Oxford Space Systems (OSS), who are finding 70% of their business is coming from the United States.
 
It is currently building one of its highest value export developments – a Large Deployable Antenna (LDA) – for LEO Earth observation mission using radar technology for a commercial customer looking to launch in 2020.
 
This will be the first non-US (and therefore International Traffic in Arms Regulations free) LDA launched into orbit, a major milestone both for OSS and the UK space sector. …

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COMCOMMENTARY

COM_a010
. F. A. DeBusk, D. Dholakia & M. Duffy: “OFAC Speaks Loudly, Carries a Bigger Stick”
(Source: Dechert LLP, 6 May 2019.)
 
* Authors: F. A. DeBusk, Esq., amanda.debusk@dechert.com, D. Dholakia, Esq., darshak.dholakia@dechert.com, M. Duffy, Esq., melissa.duffy@dechert.com, and others. All of Dechert LLP.
 

After an unusually quiet year bringing enforcement cases in 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has assumed an unprecedented pace in 2019 – since January 31, OFAC has announced 14 settlements for violations of U.S. sanctions laws, an average of one per week. The settlements have been as large US$639,023,750 for 9,335 distinct violations, and as small as US$13,381 for just six, and have targeted major international financial institutions and modest, privately held companies alike – underscoring that no potential violations are too big or too small to escape OFAC’s interest.
 
There has been a method to the madness, however, which is reflected in the admonitions OFAC has included in its recent enforcement settlements. Famously averse to spelling out compliance expectations and best practices, OFAC has begun, via the public notices that accompany its enforcement cases, to identify specific deficiencies and risk factors that it expects companies to account for. Indeed, as the relatively small size of some recent monetary settlements suggests, public notices setting out compliance expectations are often the point (from OFAC’s perspective) of a particular enforcement action, and can be as impactful as an actual monetary penalty. OFAC further underlined its expectations on May 2, 2019, when it published A Framework for OFAC Compliance Commitments (the “Framework“), which identified the five essential components of compliance: (1) management commitment; (2) risk assessment; (3) internal controls; (4) testing and auditing; and (5) training.
 
Read together, OFAC is establishing firm benchmarks that companies both in and outside the United States must pay attention to in drafting and implementing sanctions compliance policies:
 
All companies are expected to develop a sanctions compliance program (“SCP”).
Yes, virtually all. In its Framework, OFAC “strongly encourages organizations subject to U.S. jurisdiction as well as foreign entities that conduct business in or with the United States, U.S.-origin goods or services” to develop a risk-based SCP (emphasis added). OFAC has identified the lack of a formal or effective SCP as an aggravating in several enforcement cases this year, and no consideration is likely to be given to a company’s minimal touchpoints to the United States if a violation is uncovered. Conversely, the Framework does say that OFAC will “consider favorably subject persons that had effective SCPs at the time of an apparent violation.”
 
SCPs should be tested and audited to ensure they are implementable and effective at a working level.
As OFAC states in its Framework, testing and auditing procedures must be “appropriate to the level and sophistication” of a company’s SCP, and should be calibrated to ensure any weaknesses or deficiencies are identified. That includes an independent and objective assessment of whether an SCP exists on more than paper. For instance, OFAC has cited “ineffective” compliance programs as an aggravating factor in an enforcement case. Similarly, in a recent settlement involving a major (non-U.S.) financial institution, OFAC found that the bank’s compliance program was “inadequate to manage the bank’s risk and suffered from multiple systemic deficiencies.”
 
Senior management must empower and allocate adequate resources to compliance officers.
OFAC has credited companies with taking remedial measures to increase their compliance staffing and budget. For instance, in one recent enforcement case OFAC cited the appointment of a dedicated sanctions compliance officer as a mitigating factor. In another case, OFAC approvingly noted the appointment of a Head of Trade Compliance reporting directly to Group General Counsel. Conversely, OFAC has cited “inadequate” sanctions compliance programs as an aggravating factor, and in one recent case, the use of deficient screening software was identified as the root cause of the violation.
 
Risk assessments should be regularly updated, especially before merging with or acquiring new businesses.
The basis of any SCP is a risk-assessment that identifies a company’s specific risks, taking into account the profile of its customers, supply, and distribution chains; the products and services it sells, and where it does business. In its Framework, OFAC states that a risk assessment should “generally consist of a holistic review … and assess […] touchpoints to the outside world.” As a company’s business profile changes, so will its risk assessment. This is never more critical than when merging or acquiring new businesses, as made clear by several recent enforcement cases, as the acquiring entity assumes its subsidiaries liability but also its risk profile. For instance, despite recently penalizing a U.S. parent entity for the actions of its non-U.S. subsidiary, OFAC did cite approvingly to the U.S. parent’s extensive “preventative” conduct in updating its SCP during the due diligence process prior to acquisition.
 
Newly acquired entities, especially those outside the United States or operating in high-risk jurisdictions, should be regularly audited.
A U.S. acquiring entity’s obligations are not fulfilled simply by updating its risk assessments, however. As OFAC states in its Framework, “after [a merger or acquisition] transaction is completed, the organization’s Audit and Testing function will be critical to identifying any sanctions-related issues.” For instance, when one U.S. company acquired a European entity in 2012, it required it to cease all of its Cuba business. Nonetheless, such business continued, and OFAC held the U.S. parent liable for failing to conduct regular audits of its European subsidiary. In another recent case, OFAC alleged the U.S. acquirer was liable even though it trained and secured written commitments from its Chinese subsidiary not to engage in Iran business.
 
U.S. companies with non-U.S. operations have heightened obligations to ensure they are not facilitating transactions.
The risk of an OFAC violation increases as U.S. companies acquire or establish operations outside the United States. As OFAC notes in its Framework, this can be due to a number of factors – including difficulties in integrating compliance cultures and the lack of a centralized compliance function. However, it can also be because of an over-centralization of certain functions. For instance, in one recent enforcement case the U.S. parent was held liable for processing funds transfers relating to its Turkish and Chinese subsidiaries’ business with sanctioned vessels. In this case, it was the U.S parent’s centralized accounting function that precipitated the violation.
 
Trainings should be tailored to business risk and to employees at every level of the company – as well as other stakeholders.
In its Framework, OFAC indicates that periodic trainings should be provided to all “appropriate” personnel and, “as appropriate, stakeholders.” However, it also emphasizes that trainings should be “further tailored to high-risk employees within the organization,” which suggests that – as with SCPs more generally – there is no one-size-fits-all solution. For instance, in a 2018 settlement with a major non-U.S. bank, OFAC cited approvingly to its development of both a “comprehensive training regime for employees” across the company as well as “targeted, in-person training for employees with a higher-risk of exposure to sanctions-related transactions.” Companies should also consider mandating such trainings for high-risk suppliers, as did one recent target of an enforcement action after OFAC alleged it was liable for indirectly procuring North Korean products through its Chinese suppliers.
 
Supply chains and distribution chains should be audited.
It’s not just a company’s SCP that needs to be audited. As OFAC states in its Framework, as part of developing internal controls capable of identifying, interdicting, escalating, and reporting potential violations, a company should ensure that it is enforcing its policies through internal and/or external audits. In a recent enforcement case, OFAC introduced the concept of “full spectrum supply chain due diligence” when sourcing products from high-risk regions such as China. OFAC went on to state that such steps “could include, but are not limited to, implementing supply chain audits with country-of-origin verification.” Although that specific case involved a supply chain, companies should also consider taking similar measures when utilizing overseas distributors.
 
Warning signs should be taken seriously by senior management.
In its Framework, OFAC emphasizes that senior management should ensure direct reporting lines between the SCP function and senior management, and that employees must feel empowered to report misconduct without fear of reprisal. However, as several recent enforcement cases make clear, senior management must also act upon such warnings – whether they are raised internally or externally. For instance, in one recent enforcement case, the company’s internal investigation revealed that two reports to the ethics helpline regarding sales to Cuba led the relevant manager to seek assurances from an intermediary company and remind employees of their compliance obligations, but did not result in a full investigation. In another, OFAC faulted the company for “repeatedly ignoring warning signs that its conduct constituted or likely constituted” a violation, such as when banks refused to process an incoming payment involving an entity on the Sectoral Sanctions Identifications List.
 
Individual employees should be held accountable.
In its Framework, OFAC emphasizes that in several instances, “individual employees – particularly in supervisory, managerial, or executive-level positions – have played integral roles in causing or facilitating” OFAC violations. Although it has never targeted individual officers, directors, or employees in an enforcement action, OFAC warned that it will “consider using its enforcement authorities not only against the violating entities, but against the individuals as well.” This continues an emerging theme – in conjunction with one enforcement case earlier this year, OFAC sanctioned (but did not target for enforcement) the manager of the Turkish subsidiary alleged to be responsible for the prohibited conduct. And in several other enforcement matters, OFAC has cited (or required, by the terms of its settlement agreements) the firing or demotion of individual employees.
 
Crucially, these compliance expectations are not merely theoretical – in many recent cases, OFAC has explicitly included such commitments in the terms of its settlement agreements. If breached, the terms of such agreements could result in the underlying investigation being re-opened by OFAC, which further underscores the need for a pro-active approach to compliance. Companies should expect continued enforcement from OFAC, and use its recent activity as an opportunity to review and re-assess their own SCPs, utilizing the principles set out above. Because U.S. sanctions change and evolve so frequently, and because they are becoming increasingly nuanced and complex, this review and assessment should become an ongoing process to ensure that weaknesses and deficiencies do not emerge.

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* Author: George R. Tuttle III, Law Offices of George R. Tuttle, LLP, geo@tuttlelaw.com or 415-986-8780
 
Adding confusion to mayhem, CBP issued CSMS #19-000236Update – Change in Effective Date of Duty Increase of Section 301 (Tranche 3) Duties.
 
Given the different and unusual language in the Federal Register notice on the section 301 rate increase for list 3 goods, there have been lots of questions surrounding when the rate increase will affect shipments.
 
In the Federal Registerdated May 9, 2019, CBP stated that the section 301 duty increase on list 3 goods would be effective for Chinese goods:
 
entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and exported to the United States on or after May 10, 2019 …
 
Just how should we read this sentence? Many companies have inquired about whether the duty increase to list 3 goods applies to goods exported from China on or before May 10, 2019 but arriving and entering in the United States after May 10, 2019. (For further information on the term “entry”, see 19 CFR 141.68 and 141.69).
 
In CSMS #19-000236 issued today, CBP clarified that
  • For goods entered on or after May 10, 2019 and exported to the United States before May 10, 2019, the 10% duty rate will still apply.
  • For goods entered on or after May 10, 2019 and exported to the United States on or after May 10, 2019, the 25% rate will apply.
 
CBP is working with the USTR on additional guidance on the entry filing requirements for these imports. CBP also stated that if you are still confused, you can pay the 25% duty and file a Post Summary Correction when filing instructions are available for the 10% duty. Alternatively, importers can delay filing their entry summary within the standard ten-day entry summary filing period until additional filing instructions are available for the 10% duty.
The Section 301 duties only apply to products of China and are based on the country of origin, not the country of export. 

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COM_a212S. Cogman, J. Cross & D. Hudson: “OFAC Emphasizes Importance of Risk-Based Sanctions Compliance Programs for U.S. and International Companies”

(Source: Herbert Smith Freehills, 8 May, 2019.)
 
* Authors: S. Cogman Esq., susannah.cogman@hsf.com, J. Cross Esq., jonathan.cross@hsf.com, D. Hudson Esq., daniel.hudson@hsf.com, and others. All of Herbert Smith Freehills
 
Further emphasizing its expectation that all companies whose business touches on the United States should maintain a robust, risk-based US economic sanctions compliance program (“SCP”), the US Treasury’s Office of Foreign Assets Control (“OFAC”) has published a detailed “
Framework for OFAC Compliance Commitments
(the “Framework”) setting forth the key components of an adequate SCP. OFAC’s release of the Framework heightens the need for US and international companies to review their existing policies, procedures and controls relating to sanctions compliance, and to make appropriate changes to update relevant policies in line with OFAC’s guidance. As the number and scale of US sanctions enforcement actions increase, maintaining an effective SCP is an essential tool for managing sanctions risk; conversely, the Framework makes clear that the absence of an adequate SCP will be viewed negatively by OFAC pursuant to its 
Economic Sanctions Enforcement Guidelines
.
 
The Framework includes a discussion of the typical “root causes” of sanctions violations leading to OFAC enforcement action; in most cases, SCP deficiencies are key elements in these examples. Thus, all companies whose business directly or indirectly involves the US or US persons should review their SCP carefully in consideration of these identified root causes.
 
 
Who needs to implement an SCP?
 
The Framework explains that OFAC does not “require” a formal SCP, meaning that in the absence of an underlying violation of sanctions requirements, failing to maintain an SCP is not itself a basis for enforcement. Nevertheless, OFAC “strongly encourages” “organizations subject to US jurisdiction, as well as foreign entities that conduct business in or with the United States, US persons, or using US-origin goods or services” to implement an SCP. The Framework further reiterates that a company’s SCP, both at the time of the apparent violation and after the violation, will be evaluated in an enforcement action, and is a substantial factor in OFAC’s analysis as to whether a case is deemed “egregious,” meriting higher penalties.
 
This expectation is not limited to companies that are organized under US laws, because most non-US companies doing business internationally would have exposure to US persons and/or US-origin goods or services. For example, almost all transactions denominated in US dollars are processed by banks based in the US who are US persons; while at the same time many companies use US based computer servers and other IT infrastructure. Many non-US companies also have employees who are US citizens or permanent residents. Further, causing US persons to violate US sanctions requirements, as well as causing the prohibited export of services from the US in aid of sanctioned transactions, may lead to liability for non-US persons. Each of these “touchpoints” to the US can expose non-US companies to criminal and civil risks under US law, especially in the absence of an SCP.
 
Furthermore, a number of the root causes identified are generally more relevant to non-US persons. For example, non-US persons might re-export US-origin goods, technology or services to, or use the US financial system for commercial transactions with, OFAC-sanctioned persons or countries. Even though OFAC has in the past focused on organizations that are large or sophisticated, even smaller companies now should consider that, with the publication of the Framework, they are on fair notice of OFAC’s expectations that they have a risk-based SCP.
 
What are the essential components of an SCP?
 
While emphasizing that there is no one-size-fits-all program and all SCPs should be risk-based, the Framework lays out five essential components for the SCP: (i) management commitment; (ii) risk assessment; (iii) internal controls (including written policies and procedures); (iv) testing and auditing; and (v) training. Most notably:
 
   – The Framework expressly recommends that senior management review and approve the organization’s SCP. “Senior management” typically should include senior leadership, executives, and/or the board of directors. Review and approval should be clearly documented. The Framework notes that visible, senior management endorsement and support for a company’s SCP will generally improve the policy’s effectiveness by demonstrating senior management commitment and empowering other constituencies within the company to take action in order to prevent violations of the SCP or of underlying sanctions requirements.


  – The Framework states that organizations should appoint a dedicated OFAC sanctions compliance officer – this could be the same person serving in other senior compliance positions, such as the Bank Secrecy Act Officer (for financial institutions) or export control officers. The key is that OFAC compliance responsibility is clearly assigned to named personnel within the organization, who are themselves adequately trained to implement and administer the policy.


   – The Framework also recommends “direct reporting lines between the SCP function and senior management, including routing and periodic meetings between these two elements of the organization.” If the designated sanctions compliance officer reports to the senior management through a dotted line (e.g., through the General Counsel or the head of another business function), the reporting structure may need to be revised to provide more direct interactions between the compliance officer and senior management.


  – The Framework emphasizes the use of information technology software and systems to support sanctions compliance. Screening software has now been commonly adopted by many large organizations as part of their SCP; however, companies should avoid simply using standard software without attention to its capabilities and parameters and how those relate to the company’s other business processes. Some manual review and testing are still generally expected. For example, companies should review which parties are being screened (e.g., customers, supply chain participants, intermediaries, counterparties of customers, and owners and controllers of these persons in some cases), and make sure that the screening software periodically re-screens these parties. Notably, one root cause identified indicates that software that does not account for alternative spellings is a common cause for sanctions violations, so a “fuzzy lookup” function should be used. As another example, software that generates many false hits could deplete compliance resources for higher-risk monitoring, and therefore customization may be needed to systematically rule out “false hits” and other spurious results. The sanctions compliance officer is expected to work closely with software experts in this area to optimize the software performance and to reduce faults and errors.


  – The Framework specifically calls for a routine sanctions risk assessment, taking into consideration specific clients, products, services, and geographic locations. The 
Economic Sanctions Enforcement Guidelines
 also provides a useful OFAC Risk Matrix for this purpose. While it is common for the risk assessment to be part of a larger exercise reviewing a variety of the company’s financial controls and operational risks (usually carried out by an organization’s internal audit function), the detailed analysis will need proper input from people who have specific knowledge and expertise in sanctions compliance. Guidance from other US regulators, such as the Justice Department, also characterizes the process of risk assessment as the “starting point” for a prosecutor’s evaluation of a company’s compliance program.


  – The Framework puts a greater emphasis on the need for the SCP to be capable of adjusting rapidly to changes in US economic sanctions. This is an issue that merits particular attention compared to other financial crime issues, because sanctions are usually put in place at short notice and some restrictions imposed in recent years are quite complex. The relevant gatekeepers should stay alert for any such changes.


  – The Framework indicates that, at minimum, companies should provide annual training to appropriate employees and personnel on sanctions compliance. It also encourages companies to train other stakeholders, such as clients, suppliers, business partners, and counterparties.
 
Key internal controls elements
 
Even though the Framework specifically covers sanctions compliance, not every element in a company’s SCP needs to be sanctions-specific. There are many key internal controls that could use a shared structure with a company’s general compliance system, which are also highlighted in 
the recently updated guidance by the Justice Department
. These include:
 
  – Employee and third party management – the risk assessment for such parties can be done as an integrated step to consider all relevant information relating to sanctions, corruption and other reputational risks, with proper input from relevant compliance functions.  
  – Policies and procedures – companies are expected to implement sanctions compliance policies and procedures, but other general compliance policies and procedures should also have a bearing on the company’s SCP. For example, companies should ensure that their record keeping policies cover sanctions-compliance related documents. In addition, a company’s financial controls policies serve as a key component of its sanctions compliance approach (e.g., by preventing the making of payments to accounts in sanctioned countries without proper review and approval).


  – Training – the design and implementation of training can be managed by a single function to cover different areas. The key is to identify the proper audiences, determine the right frequency of training, and design the training’s form and content to engage and involve the audience, maximizing effectiveness.


  – Reporting lines and internal investigations – there should be an efficient mechanism to allow employees to report potential misconduct, including potential sanctions violations. The handling process for an alleged sanctions violation should generally be in line with other types of alleged misconduct. For example, there should be proper escalation based on the nature of the allegation, the investigation should be conducted by qualified personnel (in some cases by outside counsel), and the results of such investigations should be tracked.
   – Testing and auditing – Internal audits usually carry out the testing and auditing for many risk areas at the same time. While companies now need to ensure that the audit topic includes sanctions compliance, it is also critical to examine the entire audit process. For instance, the audit scope should be informed by the risk assessment (a company’s Middle East or Russian operations might need more frequent sanctions compliance auditing), the information collection methods should be sound (in many cases, review of general ledger information is not enough, supporting documents, relevant policies and procedures should also be reviewed, and on-the-ground interviews are often needed), and recommendations should be made to reflect weaknesses identified in the auditing process and should actually be implemented.
   – Mergers and acquisitions – The business functions carrying out mergers, acquisitions and integration should be familiar with the compliance risk (including sanctions risk) due diligence expectations and be a partner in the process. Sanctions due diligence as to the business of the target company or merger partner is a particular challenge where the target or partner itself may have less than a fulsome SCP and, therefore, may have difficulty confidently representing that there are no historic violations of applicable sanctions. Post-transaction, the acquirer may face challenges in integrating the target’s SCP with the acquirer’s, especially if the target is a non-US company with limited, or no, formal SCP.
 
Conclusion
 
Designing and implementing an effective compliance program is not an easy task. In the area of sanctions compliance, compliance requires a thorough understanding of evolving sanctions regimes, operational integration, robust implementation, and continuing improvements. Both the Framework and the updated guidance from the Justice Department serve as valuable resources in this area, but every company must tailor its programs to its risk profile, resources, and structure. Despite the challenges, the reward for an effective compliance program is tremendous – not only does it help with the resolution of specific enforcement actions, but also increases a company’s operation efficiency, promotes a better culture and raises a company’s profile with its partners and counterparties. Thus, companies should seriously evaluate their investment in this area.

* * * * * * * * * * * * * * * * * * * *

COM_a313.
U. Kühn: “Can We Still Regulate Emerging Technologies?”

(Source: Valdai Discussion Club, 9 May 2019.) [Excerpts.]
 
* Author: Ulrich Kühn, Deputy Head, Arms Control and Emerging Technologies, Institute for Peace Research and Security Policy at the University of Hamburg.
 
The world was stunned when in 1997 IBM’s Deep Blue supercomputer defeated world chess champion Garry Kasparov. Twenty years later, the world champion chess program, Stockfish 8, was beaten in a 100-game match up by AlphaZero, Google’s game-playing AI software. The big difference: AlphaZero taught itself how to play chess – in under four hours! As a side note, it won or drew all 100 games! Another example of the major leaps in 21st century technology is Boston Dynamic’s Atlas robot parkouring through a landscape of boxes (see the incredible and somewhat scary video here). It does not take much imagination to see the potential for military applications in both cases in the future. That begs the question, is it already too late to regulate emerging technologies?
 
So far, the international community has regulated emerging technologies and corresponding weapons systems with three general purposes in mind: (1) to limit or prevent unnecessary or extensive human suffering, (2) to prevent certain actors from gaining access to certain technologies, and (3) to prevent all-out, that is, nuclear, war. Historically seen, the prevention of nuclear war is the youngest broad-ranging effort to regulate war technology. (By the way, the oldest known efforts date back to the Middle Ages when Pope Innocent II in 1139 banned the use of crossbows to be employed against Christians and Catholics alike.)
 
With the emergence of Weapons of Mass Destruction and International Humanitarian Law in the 20th century, efforts to regulate technological advancements became a norm that manifested itself in dozens of bilateral and multilateral international arrangements to limit or somewhat control nuclear, biological, chemical, missile, and other weapons and their corresponding technologies. Export controls, nonproliferation instruments as well as arms control and disarmament agreements came to be part and parcel of the international community’s tool kit to regulate military and dual-use technology.
 
The latest wave of technological breakthroughs in Artificial Intelligence (AI), drones or genetic engineering (CRISPR/Cas) have triggered renewed interest in humanity’s ability to secure its own survival by commonly devising rules. But in order to successfully regulate today’s emerging technologies we should get rid of a number of misleading assumptions first. I try to address three of them in the following without claiming that this list is complete.
 
One assumption, often voiced in multilateral fora such as the United Nations, is that today’s emerging technologies are vastly different as they emerge much more rapidly than previous inventions. The implicit concern is that international regulatory policies cannot keep pace. While the first assumption is at least questionable, the latter one is probably correct. The question is, was it any different back then? It took the international community almost a quarter century to devise global regulations against the spread of nuclear weapons. The Missile Technology Control Regime only came into being almost 50 years after the first long-range rocket launches. Arguably, with the Cuban Missile Crisis the Cold War superpowers had to race to the brink first before they could agree on a number of rules.
 
Seen from that angle, the UN’s current efforts to regulate so-called Lethal Autonomous Weapons Systems (sometimes called ‘Killer Robots’) before they become a dangerous feature of world politics or, in the case of the Nuclear Suppliers Group, to proactively address the potential proliferation impacts of 3D-printing are certainly positive signals. At a time of definitely increased demand for regulation, the more worrisome development is the retreat of the one nation that acted as the torchbearer of international regulatory efforts since the end of World War II – the retreat of America from multilateral diplomacy writ large.
 
Another assumption is that emerging technologies are challenging existing arms control and disarmament agreements. Again, the implicit concern seems to be that new technological inventions might contribute to the collapse of decades-old treaties. The acrimonious debates about hypersonic glide vehicles and their potential impact on the future of the US-Russian New START accord or the Russian claims regarding drones in conjunction with the end of the Intermediate-range Nuclear Forces (INF) Treaty are often cited as examples.
 
Again, the problem lies more in the political than the technological realm. Disagreements about new weapons systems or new technological enablers are anything but new, and in the past arms control-abiding nations have usually used technical working groups to address such problems to adjust or modernize the relevant rules. Unfortunately, with the waning interest in arms control and, more broadly, military restraint in a number of nations, also the appetite for cooperative solutions to common problems has vanished. In that regard, we should not make technology the scapegoat of changed political interest.
 
Finally, we seem to assume that our strategic concepts and terminologies are still fit to address the effects of emerging technologies. One typical example is to subsume all things “cyber” under the “deterrence”/”arms control” dichotomy. To begin with, most cyber weapons are developed, stored, and employed in very clandestine environments. Contrary to classical military equipment which can be visibly deployed and used e.g., for “signaling” or “assurance” missions, cyber weapons cannot be used that way without at least causing massive potential for “inadvertent escalation.” Anon, the classical laws of “escalation” and “escalation management” do not work in an environment that cannot be defined in terms of “horizontal escalation” or the attribution, and hence the “significance,” of “offensive action.”
 
The same could be said about “escalation management” on a future battlefield inhabited predominantly by killer robots. Which actions would be so significant as to be viewed as “escalatory” if human suffering is not involved, or at least not initially? Try reading some of the classic works of Thomas C. Schelling or Herman Kahn with cyber space, killer robots or drone swarms in mind and you will immediately run into some serious conceptual problems. However, this does not mean that we should do away with those concepts whatsoever – and certainly not as long as we continue to rely on old-fashioned nuclear deterrence.
 

Taken together, regulating emerging technologies is still possible and a significant number of states is engaging in such efforts on a daily basis and in various fora. Nevertheless, if we take the challenge serious, we will have to come up with some novel and certainly more creative thinking. Perhaps we should start by questioning our own fundamental assumptions about the nature of today’s emerging technologies and our understanding of how to ensure peace and security in the 21st century. … 

* * * * * * * * * * * * * * * * * * * *

TEEX/IM TRAINING EVENTS & CONFERENCES

TE_1
14
.
FCC Presents “U.S. Export Controls: The EAR from a non-U.S. Perspective”, 27 Nov in Bruchem, the Netherlands 

(Source:
Full Circle Compliance

events@fullcirclecompliance.eu
.)

 
This intermediate-level training course is specifically designed for compliance professionals and those in a similar role who aim to stay up-to-date with the latest Export Administration Regulations (EAR) requirements that apply to non-U.S. transactions.
 
The course will cover multiple topics relevant for organizations outside the U.S. that are subject to the Export Administration Regulations, including but not limited to: the U.S. regulatory framework, key EAR concepts and definitions, tips regarding classification and licensing, essential steps to ensure an EAR compliant shipment, how to handle a (potential) non-compliance issue, recent enforcement trends, and the latest regulatory amendments, including the latest U.S. Export Control Reform developments. Participants will receive a certification upon completion of the training.
 
Details
* What: U.S. Export Controls: The Export Administration Regulations (EAR) from a non-U.S. Perspective
* When: Wednesday, 27 Nov 2019
– Welcome and Registration: 9.00 am – 9.30 am
– Training hours: 9.30 am – 4.30 pm
* Where: Full Circle Compliance, Landgoed Groenhoven, Dorpsstraat 6, Bruchem, the Netherlands
* Information & Registration: via
event page
or contact FCC at
events@fullcirclecompliance.eu
or + 31 (0)23 – 844 – 9046
* This course can be followed in combination with “U.S. Export Controls: The International Traffic in Arms Regulations (ITAR) from a non-U.S. Perspective” (26 Nov 2019), and/or “The ABC of Foreign Military Sales” (29 Nov 2019). Please, see the
event page
for our combo deals.

 

* * * * * * * * * * * * * * * * * * * *

TE_List15. 
List of Approaching Events: 141 Events Posted This Week, Including 14 New Events
(Sources: Editor and Event Sponsors)

Published every Friday or last publication day of the week, o
ur overview of Approaching Events is organized to list c
ontinuously available training, training events, s
eminars & conferences, and 
webinars. 
   
If you wish to submit an event listing, please send it to
events@fullcirclecompliance.eu
, composed in the below format:
 
    
#
 * Date: Location; “Event Title”; <Weblink>”; EVENT SPONSOR
 
   ”
*” = New or updated listing  

 
Continuously Available Training
 

* E-Seminars:US Export Controls” / “Defense Trade Controls“; Export Compliance Training Institute; danielle@learnexportcompliance.com 

* Webinar: ”
Company-Wide US Export Controls Awareness Program“; Export Compliance Training Institute;
danielle@learnexportcompliance.com 

* E-Seminars: “ITAR/EAR Awareness“; Export Compliance Solutions;
spalmer@exportcompliancesolutions.com

* Webinar Series: “Complying with US Export Controls“; Commerce/BIS

* E-Seminars: “Webinars On-Demand Library“; Sandler, Travis & Rosenberg, P.A.
* Online: “International Trade Webinars“; Global Training Center
*
 
Online: “On-Demand Webinars“; “General Training“; Center for Development of Security Excellence; Defense Security Service (DSS)
* Online: “ACE Reports Training and User Guide“; DHS/CBP

* Online: ”
Increase Your International Sales – Webinar Archive“; U.S. Commercial Service

* Web Form: “Compliance Snapshot Assessment“; Commonwealth Trading Partners (CTP)
* Online: “
Customs Broker Exam Prep Course
“; The Exam Center
 
 
Seminars and Conferences

 

* May 13: Miami, FL; “Automated Commercial Environment (ACE) Export Compliance Seminar (Spanish)“; South Florida DEC  

*
May 13: The Hague, the Netherlands; “Seminar exportcontrole strategische goederen“; Ministerie van Buitenlandse Zaken

 
* May 14: Huntsville, AL; “NAITA Cyber Trade Compliance Seminar“; North Alabama International Trade Association (NAITA), Trade Collaboration Engine & Bank of America Merrill Lynch; naita@naita.org, 256-532-3505

* May 14: Miami, FL; “Automated Commercial Environment (ACE) Export Compliance Seminar“; South Florida DEC

*
 
May 15: Bristol, UK; “
A Foundation Course in Importing
“; BusinessWest
*
 
May 15-17; London, UK; “ICPA European Conference“; ICPA

* May 16: Bellevue, WA; “The Ever-Changing International Trade Landscape“; Baker McKenzie

* 
May 16: Bristol, UK; “
Export Controls and Licensing
; BusinessWest
*
 
May 16: Bristol, UK; “
Inward Processing Relief
“; BusinessWest
*
 May 16: Hamburg, Germany; “
U.S. Export Controls and Embargoes & Sanctions for European Companies
“; Hamburger Zollakademie
*
 
May 16-17; Toronto, Canada; “ICPA Canada Conference“; ICPA

* May 17: Milwaukee, WI; “Importing 201: Advanced Import Compliance“; Global Training Center

* May 19: Traverse City, MI; “Export Compliance Overview Traning“; Foster Swift Collins & Smith PC   

*
May 20: Schiphol, the Netherlands; “Voorlichting Export licenties, sanctielijsten en Dual use goederen“; ACN
*
May 20-21; Trier, Germany; “Sanctions in EU External Relations“; ERA Academy of European Law   
 


#
* May 20-24: London, UK; “Certified Classification Specialist (CCLS)“; Amber Road

* May 21: Chicago, IL; “Trade Compliance & Policy” C.H. Robinson

*
 
May 21: London, UK; “
US & UK Export Controls: A Basic Understanding
“; The Institute of Export and International Trade

 
* May 22: Burlington, MA; “Getting Your Government Contract Business from Spring to Summer“; NDIA New England

* May 30: London, UK; “London Export Control Symposium“; UK/DIT
* May 30: London, UK; “Post Brexit Documentation and Compliance“; The Institute of Export and International Trade

* Jun 5-6: Seattle, WA; “
Complying with U.S. Export Controls
“; Commerce/BIS
*
 
Jun 7: Upper Marlboro, MD; “
2019 Spring Golf Outing
“; SIA

*
 
Jun 10: Cleveland, OH; “
Letters of Credit
“; Global Training Center
*
 
Jun 11: Cleveland, OH; “
Export Doc & Proc
“; Global Training Center
*
 
Jun 11: Sheffield, UK; “
Customs Procedures and Compliance in International Trade
“; Sheffield Chamber of Commerce

 
* Jun 11: Sydney, Australia; “Defence Export Controls Outreach“; DEC


Jun 11-12: Detroit, MI; “
Complying with U.S. Export Controls
“; Commerce/BIS

*
 
Jun 12: Cleveland, OH; “
Tariff Classificatio
n“; Global Training Center
*
 
Jun 12: Derby, UK; “
Strategic Export Control: Intermediate Practitioners course
“; UK/DIT

 
* Jun 12-13: Shanghai, China; “China Forum for Legal and Compliance Officers“; American Conference Institute

*
 
Jun 13: Cleveland, OH; “
NAFTA Rules of Origin
“; Global Training Center
*
 
Jun 13: Derby, UK; “
Strategic Export Control: Foundation Workshop
“; UK/DIT
*
 
Jun 13: Derby, UK; “
Strategic Export Control: Licenses Workshop
“; UK/DIT
*
 
Jun 13: Detroit, MI; “
How to Build an Export Compliance Program
“; Commerce/BIS

 
* Jun 13: Huntsville, AL; “STOPfakes.gov Intellectual Property Protection Seminar“; Alabama District Export Council, U.S. Department of Commerce & North Alabama International Trade Association (NAITA); naita@naita.org, 256-532-3505

*
 
Jun 14: Cleveland, OH; “
Incoterms® 2010 Rules
“; Global Training 
* Jun 17-20: San Diego, CA; “ITAR Defense Trade Controls / EAR Export Controls“; ECTI

#
* Jun 17-21: Los Angeles, CA; “Certified Classification Specialist (CCLS)“; Amber Road

* Jun 25: London, UK; “Introduction to Export Licensing Controls“; The Institute of Export and International Trade
* Jun 26-28: Washington D.C.; “American Association of Exporters and Importers (AAEI) Conference“; AAEI

*
 
Jul 3: Bristol, UK; “
Introduction to Export Procedures – Export Training
“; BusinessWest
*
 
Jul 3: Cambridge, UK;
Strategic Export Control: Intermediate Practitioners Course
“; UK/DIT
*
 
Jul 4: Cambridge, UK;
Strategic Export Control: Foundation Workshop
“; UK/DIT
*
 
Jul 4: Cambridge, UK; “
Strategic Export Control: Licenses Workshop
“; UK/DIT
*
 
Jul 4: Bristol, UK;
Using Documentary Letters of Credit, Drafts and Bills”; 
BusinessWest
*
 
Jul 4: Sheffield, UK; “
An Introduction to Export
“; Sheffield Chamber of Commerce
*
 
Jul 8-9: Seattle, WA: “
Boot Camp: Achieving ITAR/EAR Compliance
“; Export Compliance Solutions (ECS);

Jul 8 – 10: National Harbour, MD; “
2019 Summer Back to Basics Conference
“; SIA

* Jul 9-11: Washington; “
BIS 2019 Annual Conference on Export Controls and Policy
“; Commerce/BIS

*
 
July 10: Sheffield, UK; “
Export Documentation – How and Why?” 
; Sheffield Chamber of Commerce

*
 
Jul 11: Birmingham, UK; “
US & UK Export Controls: A Basic Understanding
“; The Institute of Export and International Trade

#
* Jul 16-19; Chicago, IL; “Export Boot Camp“; Amber Road

*
Jul 23-25; Washington D.C.; “Anti-Corruption Compliance for High Risk Markets“; American Conference Institute

*
Jul 24-25: St. Louis, MO; “
 Complying with U.S. Export Controls
“; Commerce/BIS

 
* Jul 29-30: New Orleans, LA; “Global Trade Educational Conference“; NCBFAA Educational Institute
 
* Jul 31-Aug 1: Seattle WA; “11th Annual Pacific Northwest Export Control Conference: Export Risks and Threats in the Cyber Domain“; DoC/U.S. Commercial Service, DHS/Homeland Security Investigations, Seattle University, Dorsey & Whitney LLP

* Aug 1-2: Torrance, CA; “Customs Compliance for Import Personnel” Foreign Trade Association

* Aug 20-21: Cincinnati, OH;

Complying with U.S. Export Controls
“; Commerce/BIS

* Aug 20-21: Milpitas, CA;

Complying with U.S. Export Controls
“;
Commerce/BIS
* Aug 22: Milpitas, CA:

Encryption Controls
“;
Commerce/BIS

* Sep 2, 9, 16: Rotterdam, the Netherlands; “Awareness training Export Control, Dual-use en Sancties“; FENEX

* Sep 8-11: Chicago, IL; “2019 Annual Conference and Exposition“; National Association of Foreign Trade Zones (NAFTZ)

 
* Sep 10-11: Portland, OR; “Complying with U.S. Export Controls“; Commerce/BIS

* Sep 16-19: Austin, TX; “
ITAR Controls / EAR & OFAC Export Controls (Sep 18-19) Seminar Series
“; ECTI
; 540-433-3977
*
 
Sep 17: Sheffield, UK; “
Customs Procedures and Compliance in International Trade
“; Sheffield Chamber of Commerce


Sep 17-19: Annapolis, MD; “
The ECS 2nd Annual ITAR/EAR Symposium
“; ECS

 
* Sep 18-19: Los Angeles, CA; “Complying with U.S. Export Controls“; Commerce/BIS

*
 Sep 20: Las Vegas, NV; “
EAR and OFAC Fundamentals: Export Control Of Dual-Use Equipment
“; Barnes & Thornburg LLP

 
* Sep 24-25: Minneapolis, MN; “Complying with U.S. Export Controls“; Commerce/BIS
 
* Sep 24-25: San Francisco, CA; “West Coast Conference on FCPA Enforcement and Compliance“; American Conference Institute

#
* Sep 24-26: Los Angeles, CA; “Export Controls Specialist – Certification“; Amber Road

*
 
Sep 25: Bristol, UK; “
Classification of Goods – Using Commodity and Tariff Codes”; 
BusinessWest
* 
Sep 25: Bristol, UK; “
Incoterms® Rules 2010
“; BusinessWest
*
 
Sep 25: London, UK; “
US & UK Export Controls: A Basic Understanding
; The Institute of Export and International Trade
*
 
Sep 25: Sheffield, UK; “
Essential Incoterms – Getting it Rights
“; Sheffield Chamber of Commerce

* Sep 25-26: Amsterdam, the Netherlands; “Defence Exports Annual Conference“; SMI

#
* Sep 26: Amsterdam, The Netherlands; “Global Trade Management: Turning trade challenges into opportunities” Amber Road

*
 
Sep 26: Bristol, UK; “
Understanding The Paperwork
“; BusinessWest

* Sep 30 – Oct 3; Amsterdam, NL; “
ITAR Controls / EAR/OFAC Commercial and Military Controls
“; ECTI
; 540-433-3977

* Oct 3; Rotterdam, the Netherlands; “Trade Compliance Congres 2019“; Sdu

*
 
Oct 7: Munich, Germany; “
European and German Export Controls
“; AWA

* Oct 14-17; Columbus, OH; “
University Export Controls Seminar
“; ECTI

*
Oct 15: Singapore; “
5th Asia Pacific Summit on Economic Sanctions Compliance and Enforcement
“; 
American Conference Institute

*
Oct 17: Sheffield, UK; “
Export Documentation – How and Why?” 
; Sheffield Chamber of Commerce

#
* Oct 21-25: Chicago, IL; “Certified Classification Specialist (CCLS)“; Amber Road


Oct 28-29: Washington D.C.; “
2019 Fall Advanced Conference
“; SIA

* Oct 28-31; Phoenix, AZ; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI

#
* Oct 29-30; Tysons Corner, VA; “Conducting an internal Import/Export Audit“; Amber Road

* Nov 11-14; Washington, DC; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI

#
* Nov 19-21: Tysons Corner, VA; “Export Controls Specialist – Certification“; Amber Road

*
 
Nov 20: Bristol, UK; “
Introduction to Export Procedures – Export Training
“; BusinessWest
*
 
Nov 21: Bristol, UK; “
A Foundation Course in Importing
“; BusinessWest

*
 
Nov 26: Bruchem, The Netherlands; “The International Traffic in Arms Regulations (EAR) from a non-U.S. Perspective“; Full Circle Compliance
* 
Nov 27: Bruchem, The Netherlands; ” The Export Administration Regulations (EAR) from a non-U.S. Perspective“; Full Circle Compliance
 
*
 
Nov 27: Manchester, UK; “
US & UK Export Controls: A Basic Understanding
“; The Institute of Export and International Trade

#
* Dec 2-6: Tysons Corner, VA; “Certified Classification Specialist (CCLS)“; Amber Road

*
 
Dec 4-5: Washington, DC; “
36th International Conference on the Foreign Corrupt Practices Act
“; American Conference Institute

* Dec 9-12; Miami, FL; “
ITAR Controls / EAR & OFAC Export Controls Seminar Series
“; ECTI

* Dec 10-11: New York, NY; ” 
10th Annual New York Forum on Economic Sanctions“; American Conference Institute

*
 Dec 12-13; Washington D.C.; “
Coping with U.S. Export Controls and Sanctions 2019
“; Practicing Law Institute
 
2020

 
*
 
Jan 30-31: Houston, TX; “
14th Forum on the Foreign Corrupt Practices Act
“; 
American Conference Institute

* Feb 5-6; Munich, Germany; “Export Compliance in Europe Conference“; NielsonSmith

* Feb 24-26; Las Vegas, NV; “Winter Back to Basics Conference“; Society for International Affairs

 
Webinars 



 
* May 13: Webinar: “Introduction to Export Controls under the EAR“; SBDC

#
* May 16: Webinar: “Trade Compliance Round Up“; American Shipper

* May 17: Webinar: “Foreign Investment & Export Control Update:  Next Steps Under the FIRRMA & ECRA“; Massachusetts Export Center; 617-973-6610

* May 22: Webinar: “ITAR“; Global Training Center
* May 23: Webinar: “EAR“; Global Training Center

#
* May 28: Webinar: “ITAR-to-EAR” Orchid Advisors

* Jun 6: Webinar: “China Trade Update“; Massachusetts Export Center; 617-973-6610

*
Jun 12: Webinar: “EU Export Controls“; BDP

 

#
* Jun 13: Webinar: “Supply Chain & Global Trade Analytics“; Amber Road

* Jul 10: Webinar: “
EAR
“; Global Training Center
 
* Jul 11: Webinar: “
ITAR
“; Global Training Center

* Jul 19: Webinar: “Managing Export Operations and Compliance“; Massachusetts Export Center; 617-973-6610

 
* Sep 25: Webinar: “
EAR
“; Global Training Center
 
* Sep 26: Webinar: “
ITAR
“; Global Training Center

* Oct 29: Webinar: “Key updates on export controls and sanctions“; Baker McKenzie
* Dec 17: Webinar: “Managing Emerging Compliance Risks“; Baker McKenzie

* * * * * * * * * * * * * * * * * * * *

ENEDITOR’S NOTES

EN_a116
. Bartlett’s Unfamiliar Quotations

(Source: Editor)

 

*
Isaac D’Israeli (11 May 1766 – 19 Jan 1848; was a British writer, scholar, and man of letters. He is best known for his essays, his associations with other men of letters, and as the father of British Prime Minister Benjamin Disraeli.)
  
– “The wisdom of the wise, and the experience of ages, may be preserved by quotation.”
  – “The wise make proverbs, and fools repeat them.”
 
This week’s proverbs:
* He who always thinks it is too soon is sure to come too late. | German Proverb
* Turn your face to the sun and the shadows will fall behind you. | New Zealander Proverb
* No man can paddle two canoes at the same time. | Bantu Proverb

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EN_a217. Are Your Copies of Regulations Up to Date?
(Source: Editor)

The official versions of the following regulations are published annually in the U.S. Code of Federal Regulations (C.F.R.), but are updated as amended in the Federal Register.  The latest amendments to applicable regulations are listed below.
 

*
DHS CUSTOMS REGULATIONS
: 19 CFR, Ch. 1, Pts. 0-199.  Implemented by Dep’t of Homeland Security, U.S. Customs & Border Protection.
  – Last Amendment: 5 Apr 2019:
 
5 Apr 2019: 84 FR 13499-13513: Civil Monetary Penalty Adjustments for Inflation
 

DOC EXPORT ADMINISTRATION REGULATIONS (EAR)
: 15 CFR Subtit. B, Ch. VII, Pts. 730-774. Implemented by Dep’t of Commerce, Bureau of Industry & Security.

  – Last Amendment: 11 Apr 2019:
84 FR 14608-14614
: Revisions to the Unverified List (UVL)

 
*
DOC FOREIGN TRADE REGULATIONS (FTR)
: 15 CFR Part 30.  Implemented by Dep’t of Commerce, U.S. Census Bureau.
  – Last Amendment: 24 Apr 2018: 
83 FR 17749-17751
: Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates
  – HTS codes that are not valid for AES are available
here
.
  – The latest edition (1 Jan 2019) of Bartlett’s Annotated FTR (“BAFTR”), by James E. Bartlett III, is available for downloading in Word format. The BAFTR contains all FTR amendments, FTR Letters and Notices, a large Index, and approximately 250 footnotes containing case annotations, practice tips, Census/AES guidance, and explanations of the numerous errors contained in the official text. Subscribers receive revised copies in Microsoft Word every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance 
website
.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR. Government employees (including military) and employees of universities are eligible for a 50% discount on both publications at 
www.FullCircleCompiance.eu
.  
 

DOD NATIONAL INDUSTRIAL SECURITY PROGRAM OPERATING MANUAL (NISPOM)
: DoD 5220.22-M. Implemented by Dep’t of Defense.
  – Last Amendment: 18 May 2016: 

Change 2
: Implement an insider threat program; reporting requirements for Cleared Defense Contractors; alignment with Federal standards for classified information systems; incorporated and cancelled Supp. 1 to the NISPOM (Summary 
here
.) 
 

DOE ASSISTANCE TO FOREIGN ATOMIC ENERGY ACTIVITIES
: 10 CFR Part 810; Implemented by Dep’t of Energy, National Nuclear Security Administration, under the Atomic Energy Act of 1954.
  – Last Amendment: 23 Feb 2015:

80 FR 9359
, comprehensive updating of regulations, updates the activities and technologies subject to specific authorization and DOE reporting requirements. This rule also identifies destinations with respect to which most assistance would be generally authorized and destinations that would require a specific authorization by the Secretary of Energy.
 

DOE EXPORT AND IMPORT OF NUCLEAR EQUIPMENT AND MATERIAL
; 10 CFR Part 110; Implemented by Dep’t of Energy, U.S. Nuclear Regulatory Commission, under the Atomic Energy Act of 1954.
  – Last Amendment: 20 Nov 2018, 10 CFR 110.6, Re-transfers.
 
*
DOJ ATF ARMS IMPORT REGULATIONS: 27 CFR Part 447-Importation of Arms, Ammunition, and Implements of War.  Implemented by Dep’t of Justice, Bureau of Alcohol, Tobacco, Firearms & Explosives.
  – Last Amendment: 14 Mar 2019:
 
84 FR 9239-9240
: Bump-Stock-Type Devices
 

DOS INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR)
: 22 C.F.R. Ch. I, Subch. M, Pts. 120-130. Implemented by Dep’t of State, Directorate of Defense Trade Controls.
  – Last Amendment: 19 Apr 2019: 84 FR 16398-16402: International Traffic in Arms Regulations: Transfers Made by or for a Department or Agency of the U.S. Government 
  – 
The only available fully updated copy (latest edition: 19 Apr 2019) of the ITAR with all amendments is contained in 
Bartlett’s Annotated ITAR 
(“BITAR”), by James E. Bartlett III. The BITAR is a 361-page Word document containing all ITAR amendments to date, plus a large Index, over 800 footnotes containing amendment histories, case annotations, practice tips, DDTC guidance, and explanations of errors in the official ITAR text. Subscribers receive updated copies of the BITAR in Word by download, usually revised within 24 hours after every ITAR amendment. The BITAR is available by annual subscription from the Full Circle Compliance 
website
. BAFTR subscribers receive a $25 discount on subscriptions to the BITAR. Please 
contact us
to receive your discount code.
 
*
 DOT FOREIGN ASSETS CONTROL REGULATIONS (OFAC FACR): 31 CFR, Parts 500-599, Embargoes, Sanctions, Executive Orders. Implemented by Dep’t of Treasury, Office of Foreign Assets Control.

  – Last Amendment: 29 Apr 2019:
84 FR 17950-17958: Foreign Interference in U.S. Elections Sanctions Regulations [amendment of 31 CFR Part 579 to implement EO 13848]

  
*
USITC HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS, HTSA or HTSUSA), 1 Jan 2019: 19 USC 1202 Annex. Implemented by U.S. International Trade Commission. (“HTS” and “HTSA” are often seen as abbreviations for the Harmonized Tariff Schedule of the United States Annotated, shortened versions of “HTSUSA”.)
  – Last Amendment:
18 Apr 2019:
Harmonized System Update (HSU) 1906

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EN_a318
. Weekly Highlights of the Daily Bugle Top Stories
(Source: Editor)
 

Review last week’s top Ex/Im stories in “Weekly Highlights of Daily Bugle Top Stories” posted here.

* * * * * * * * * * * * * * * * * * * *

* The Ex/Im Daily Update is a publication of FCC Advisory B.V., compiled by: Editor, James E. Bartlett III; Assistant Editors, Vincent J.A. Goossen and Alex Witt; and Events & Jobs Editor, Sven Goor. The Ex/Im Daily Update is emailed every business day to approximately 7,000 readers of changes to defense and high-tech trade laws and regulations. We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items.

* RIGHTS & RESTRICTIONS: This email contains no proprietary, classified, or export-controlled information. All items are obtained from public sources or are published with permission of private contributors, and may be freely circulated without further permission, provided attribution is given to “The Export/Import Daily Bugle of (date)”. Any further use of contributors’ material, however, must comply with applicable copyright laws.  If you would to submit material for inclusion in the The Export/Import Daily Update (“Daily Bugle”), please find instructions here.

* CAVEAT: The contents cannot be relied upon as legal or expert advice.  Consult your own legal counsel or compliance specialists before taking actions based upon news items or opinions from this or other unofficial sources.  If any U.S. federal tax issue is discussed in this communication, it was not intended or written by the author or sender for tax or legal advice, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or tax-related matter.

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